The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that officially ensured the deregulation of financial products known as over-the-counter derivatives. It was signed into law on December 21, 2000 by President Bill Clinton. It clarified the law so that most over-the-counter (OTC) derivatives transactions between “sophisticated parties” would not be regulated as “futures” under the Commodity Exchange Act of 1936 (CEA) or as “securities” under the federal securities laws. Instead, the major dealers of those products (banks and securities firms) would continue to have their dealings in OTC derivatives supervised by their federal regulators under general “safety and soundness” standards. The Commodity Futures Trading Commission's (CFTC) desire to have “Functional regulation” of the market was also rejected. Instead, the CFTC would continue to do “entity-based supervision of OTC derivatives dealers.” These derivatives, especially the credit default swap, would be at the heart of the financial crisis of 2008 and the subsequent 2008–2012 global recession.
Read more about Commodity Futures Modernization Act Of 2000: Introduction, The CFMA As Implementation and Expansion of The PWG Report, Credit Default Swaps, 2009 Treasury Department Proposed OTC Derivatives Legislation
Famous quotes containing the words commodity, futures and/or act:
“There used to be a thing or a commodity we put great store by. It was called the People. Find out where the People have gone. I don’t mean the square-eyed toothpaste-and-hair-dye people or the new-car-or-bust people, or the success-and-coronary people. Maybe they never existed, but if there ever were the People, that’s the commodity the Declaration was talking about, and Mr. Lincoln.”
—John Steinbeck (1902–1968)
“One of the things that is most striking about the young generation is that they never talk about their own futures, there are no futures for this generation, not any of them and so naturally they never think of them. It is very striking, they do not live in the present they just live, as well as they can, and they do not plan. It is extraordinary that whole populations have no projects for a future, none at all.”
—Gertrude Stein (1874–1946)
“We all have—to put it as nicely as I can—our lower centres and our higher centres. Our lower centres act: they act with terrible power that sometimes destroys us; but they don’t talk.... Since the war the lower centres have become vocal. And the effect is that of an earthquake. For they speak truths that have never been spoken before—truths that the makers of our domestic institutions have tried to ignore.”
—George Bernard Shaw (1856–1950)